City slots do-over

Our view: With his project stuck in legal limbo, it's time the developer of a planned city slots parlor got out of the way and let others have a chance

August 26, 2010

In gambling, there are long shots, hundred-to-one wagers, and "Hail Mary" bets. All of them would seem to have a better chance at success than Canadian developer Michael Moldenhauer ever building a slots parlor near downtown Baltimore.

He has been turned down for a license by the state commission in charge of reviewing applications. He's regarded to be in violation of his contract with the city. He's already been rejected to develop a racetrack and casino in New Mexico — a circumstance that by itself precludes him from being licensed in Maryland. And he appears to lack the financial "stability, integrity and responsibility" to take on the project anyway, according to a recently disclosed state report.

And yet despite the odds, the developer and his Baltimore City Entertainment Group are fighting to stay in the hunt to develop a 3,750-machine slots facility on Russell Street. This has resulted in an appeal to the state and dueling lawsuits with the city, all of which serve only to delay the project — at great cost to city and state taxpayers.

Enough is enough. It's time Mr. Moldenhauer gave up the ghost, dropped the litigation and allowed the state to go back to the drawing board.

Certainly, he's unlikely to win in the courtroom. His violations of his contract with the city are clear enough. BCEG never paid the state the $19.5 million license fee required to submit a bid for 3,750 slot machines (only the $3 million required for the developer's initial proposal of just 500). Mostly, his legacy in Baltimore is a lot of broken promises and missed deadlines.

No doubt the effort has been hurt by the global recession and tight money markets. The pending proposal to build a large competing slots facility at Arundel Mills mall — assuming Anne Arundel County voters approve the requisite zoning at the polls this fall — has probably been unhelpful to his cause as well.

In essence, Mr. Moldenhauer gambled and lost. The only difference between his circumstance and a proverbial roll of the dice is that he could delay his losses, no matter how inevitable, with months and perhaps years of appeals and legal roadblocks.

Meanwhile, the longer the failed effort is dragged out, the longer Baltimore will be without a slots facility and the longer city residents will go without property tax relief and state residents will be denied the millions of dollars in education aid the machines would generate.

Even with the Arundel Mills project, there is reason to believe the city site will attract more bidders than in 2009, when Mr. Moldenhauer was the sole applicant: The markets have improved, the actual location is more attractive than originally proposed, and the city even has financing of a parking garage in place.

But the project probably can't go forward until the matter is resolved in court. That leaves it up to Mr. Moldenhauer to do the honorable thing and drop his litigation. Let others have a chance at such a critical project for Baltimore's future.